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03/11/2012

On the Apparently Growing Class Divide and What can be Done About it-Becker

The US has traditionally stood for a large amount of equality of opportunity, at least among whites. This implies that the success of children would depend mainly on their ability and energy, and much less so on their parents’ incomes and education. This has always been an aspiration rather than a fact, and the disturbing evidence in several studies indicates that equality of opportunity has declined by a lot during the past half century. In a recent book, Coming Apart, Charles Murray highlights this apparent fact with interesting statistics.

Another way to state what has happened during the past half century is that the degree of mobility between generations has apparently declined. The evidence suggests that children of successful parents are more likely to be successful relative to others of their own generation than was true in the first half of the 20th century. One important reason for this, I believe, is that education is now a much more important determinant of economic success than it was in 1960. Educated parents have always been much better than parents with relatively little education at preparing their children to succeed at school. This difference in preparation of children is now more important because greater education has become more necessary to succeed in the modern knowledge-driven American economy.

One approach to thinking about the causes of this trend is to divide employment opportunities into good and bad jobs. Some discussions assume, implicitly or explicitly, that the number of good jobs is rather fixed, that many individuals of different classes are capable of filling these good jobs, and hence that who gets the better jobs depends on contacts, influence, and credentials, like having a college degree. On this approach to labor markets, children of upper class parents-those with greater income and education- are more likely to succeed now than in the past because their overall education and other “credentials” have increased compared to those of children from the lower classes.

This seems to be the implicit view of the job market behind an op-ed piece this week in the NY Times by Charles Murray. In discussing what can be done to reduce the advantage of children from the upper classes, he advocates eliminating unpaid internships, eliminating the use of SAT scores in determining college admissions, and ending the ability of companies to list a college degree as necessary to apply for certain jobs. On the view that the number of good jobs is rather fixed, that many young persons of all backgrounds are capable of handling these jobs, and that having a college education does not generally signify greater knowledge and other skills, his suggestions might reduce some of the “artificial” advantages that children from the upper classes have in getting these jobs.

A very different view of the labor market is much more consistent with the substantial growth in the number of “good” jobs during the past century in every developed country. On this human capital inerpretation, the number of good jobs is not fixed but depends on the skills of workers, so that companies provide many more good jobs when the skills of workers increase. This approach implies that children from the upper classes are much more likely to get good jobs because they have much better skill sets than do children from the lower classes. This skill set includes not just knowledge and information, but also the ability to get to work on time, to start and finish tasks successfully, and to get along with colleagues. Children from the lower classes have fallen further behind in their earnings because their skill sets have fallen further behind those of children from the upper classes.

The reasons why this has happened since 1960 are not fully known, but some changes since then do seem crucial. Children from the lower classes are now far more likely to be raised by single parents than they were in 1960. Guidance from both parents is of great importance in preparing children for modern labor markets, and for all other aspects of life. Educated upper class parents start teaching their children when they are very young considerable knowledge and also other traits that are valuable when the children grow up. My colleague James Heckman has stressed that lower class children are by age 5 already considerably behind children from the upper classes, and that these differences grow as children age. As a result, children from lower classes are much more likely to drop out of high school, and much less likely to receive a college education. They end up with worse jobs, greater unemployment, and much higher crime rates.

From the prospective that the number of good jobs depends on the skills of workers, Murray’s proposals make little sense. The goal should not be to take away unpaid internships and other ways that improve learning, sometimes mainly of children from the upper classes. Rather, the goal should be to increase the skills of children from poorer, less educated, and less stable family backgrounds, so that they become more productive in the work place.

I am not suggesting this goal is easily accomplished. For example, how do we make parents more caring about their children, or reduce the tendency of women from the lower classes to have children without being married or without being in other stable relationships with the fathers of their children? The two most attractive options appear to be greater emphasis on early childhood education and better schools, but much further research is necessary. This research is more likely to be forthcoming once it is generally accepted that limited knowledge and limited other work skills are the main reasons why children from low educated and low income families have over time fallen further behind children from educated and wealthier families.

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"For example, how do we make parents more caring about their children, or reduce the tendency of women from the lower classes to have children without being married or without being in other stable relationships with the fathers of their children?"

Ronald Reagan once remarked that Lyndon Johnson declared war on poverty and poverty won. Misguided government policies have contributed to the decrease in upward mobility of those from lower income families.

The now-defunct welfare program Assistance to Families with Dependent Children (AFDC) dramatically contributed to the alarming phenomenon of single-parent black families by providing an incentive for producing children out of wedlock. Government enforced child support payments for "deadbeat dads" erodes the biologically natural selectiveness of females in their choice of males (a selectiveness that includes dependability) and in the choice to engage in non-marital procreative sex with males that are not desirable as husbands or do not desire marriage. Public policy has accelerated and deepened the erosion of two-parent households that the growing economic independence of women has made inevitable.

It is also worth noting that many lower class families are comprised of illegal immigrants and children of such immigrants. Those children are frequently ESL (English as second language) students, and such students find themselves at a huge disadvantage in school. The quantity of illegal immigration has certainly contributed to statistics that purport to show a decline in upward mobility of the lower class.

Somewhat overlapping with the social mobility concerns, there have been randomized studies about the effectiveness of pre-natal and early childhood programs on crime prevention. See https://extension.unh.edu/Family/documents/parentingandcrimeprevention.pdf for a review.

As research on Head Start shows, improving early childhood education has not resulted in increasing the skills of low income children. Any benefit disappears at least by the end of elementary school.

The lack of a father in the home is a key cause here and until this is remedied (eliminate the many remaining welfare programs that allow women to reproduce without husbands) nothing will change.

One can live relatively well without working and without a husband. There are matriarchal setups in all major cities (mostly among blacks, but it's probably spreading to lower class whites) in which great grandma and grandma get disability and qualify for food stamps, housing subsidies, heating subsidies, Medicare/caid, and nearby private charitable assistance. Mom, her daughter, and her daughter's daughter, also qualify for all except disability as well as WIC, Head Start, and free school meals. Pooling these sources of income and in-kind subsidies makes for a very nice lifestyle. According to the most recent census, these same people can afford cell phones, tvs, computers, cars, and many of the accoutrements of middle class life. Why work? Why marry?

And, of course, the fathers of the various children get off scott free.

Anytime a discussion involves the class divide and what needs to be done to narrow it, it always seems to begin with the assumption that the upper class is where they are because they take advantage and opportunities away from the lower class. This view seems to be a left over of the real class system of ancient times, where the upper class (nobility, royalty, masters, land owners) lorded over the lower class (peasants, slaves, etc)and one's place in society was set in stone. However, in a free market there is no true class system. Yes, economically speaking there is a upper, middle, and lower groups of people, but there is no true class system. While it might be hard to move from the lower class to the upper class, it is very easy to go from the highest wealth to the lowest. We live in a fluid society. Life is always unfair and equality is impossible and as long as you are comparing wealth based on current generations there will always be poor people. Not everyone can be Bill Gates. There is no such thing as Utopia (the word is derived from the phrase for no place). The real debate should not focus on how to punish the "Upper Class", but how do we expand wealth for all individuals. Up until now the USA has accomplished this goal exceptionally, just look at the wealth America's poor today has today compared to the 1930s and the rest of the world. I am not referring to income but real wealth. A poor person's life today in America is far better than even a King's wealth during the middle ages because the total wealth for all has increased exponentially over the last few hundred years. The question should be "How can America continue to expand its wealth for all?"

"As research on Head Start shows, improving early childhood education has not resulted in increasing the skills of low income children. Any benefit disappears at least by the end of elementary school."
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Because any additional education funding for lower income children gets cut off after preschool. That's like someone paying for a gym membership, then suddenly complaining that exercise doesn't work when they stop going to the gym and start getting fat again.

"of course, the fathers of the various children get off scott free."
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There's this thing called child support. Perhaps you've heard of it?

The simplest thing one could do to improve the situation is abolish the war on drugs. That, after all, is one major cause for the shortage of adult males in the low income, especially the black, marriage market, which in turn helps explain the large number of women who, unable to find a suitable husband, choose to produce children without one.

As for Mike Hunter's response on Head Start, I don't find it convincing. If Head Start really works then, as its label suggests, the benefit of early childhood education ought to have a permanent effect, not one that vanishes in the absence of additional later help.

Funding for lower income children is not cut after preschools ends, it increases, and massively. Is called public education budgets that spend, in ceters of poverty like Newark, DC, etc. as much as $20K+ per student (and I they ignore counting capital costs and anything they can get away with). Even if you defined "cutting" as relative to what middle class kids get (since they may not have gotten Head Start), I doubt this would be true. In districts that serve a broader range of income groups -- say in ours of Mecklenburg county -- inner city schools are funded at several thousand dollars per student more than the outer city. The drop off the studies show for Head Start are driven by other, less tractable, factors.

"For example, how do we make parents more caring about their children, or reduce the tendency of women from the lower classes to have children without being married or without being in other stable relationships with the fathers of their children?"
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Reduce the tendency of women from lower classes to have children by ensuring access to reliable, affordable contraception. Period. Single mothers, especially those already starting out from a disadvantaged socioeconomic position, are often unable to experience upward mobility with the added the burdens of single parenthood.

Enforcing child support orders won't make fathers "care" more, but ensuring that women aren't forced into this situation with a man with whom she isn't in a stable relationship in the first place may be a good place to start. Let the deadbeats be deadbeats, but we don't need to continue having policies that result in them becoming deadbeat fathers.

Furthermore, I think that Becker should tread lightly in the assumption that single parents 'not caring' is the reason for this divide. Single parents, regardless of gender, simply do not have enough hours in the day to do everything. It has nothing to do with intent--it's just simply the reality. Increasing the level of education at the primary school level won't help if children aren't able to get the same level of support and quality time from their single parent that their peers in two-parent households have. This problem is much more complex, which is why it is even more imperative that women (especially in the lower classes) are given access to affordable, reliable contraception.

Circumvent the practical problems of being a single parent that are apparently at the center of the class divide by making sure that women CAN prevent pregnancy until they are either married or in a stable relationship.

"This research is more likely to be forthcoming once it is generally accepted that limited knowledge and limited other work skills are the main reasons why children from low educated and low income families have over time fallen further behind children from educated and wealthier families."

.............. The almost complete emphasis on EDUCATION has become an excuse and attempted justification to defend an utterly unsustainable status quo.

First, there is all the faux "handwringing" over the loss of "good paying mfg. jobs. Really? Truth is "good paying mfg" jobs were not "good paying" until many of them were unionized and we had a war and "baby boom" that gave us a tight labor supply.

Were jobs now taken by robotics or "Chinese" labor skilled tasks that allowed those blue collar folk to raise a family and in many cases send their kids to college debt free? Hardly.

The fact of most of the jobs being replaced by "service sector" jobs does not by itself explain the long stagnant, even declining, wages of the last 40 years. Instead there has been a cultural shift that took advantage of the difficulty of forming collective bargaining units across retail and "service" industries, coupled with an economy that is has not been generating sufficient jobs since before the "jobless recovery" and partially masked by the housing bubble wave.

There are many examples, the most obvious being that of Walmart, a company that is far richer then GM was in its best years, but opts to pay its "valued associates" so poorly that our welfare safety net meant for the truly impoverished subsidized Walmart's payroll to the tune of one billion a year. Shop there or not, each household is kicking in $10 toward Walmart making payroll.

Examples abound of employees doing jobs that require skills, standing all day, handling difficult customer problems at least as difficult as those of most in the assembly lines, mills and other "good mfg" jobs of the "rosy" past.

MORE EDUCATION? Sure, we're all for it. We see that the US having a 30% drop rate at HS level with college graduation rates of 25-30% leave us ill-prepared for the new "information age" which I guess is that of the Apple model? Qualcomm? to design and patent things made by the billions in the poorest wage venues of the world?

But EDUCATION (meaning college) is hardly the full answer. Had we a college graduation rate of 40% would we not still require about the same percentage of "Walmart/service sector" employees? And what of the college grads themselves? Fully a decade before the "melt down" we were discussing the wisdom of our kids investing in an engineering or other degree that would pit himself against a kid in India or China.

There would be some gains to be sure as college, ha! if done well, is likely to prepare a kid to survive in a competitive world, or is it more that of having an Expectation of surviving? and of course having a better chance at even a crappy job that could be done by a good HS student.

So what is "the cure?" ie..... in terms of making our society work? One is obvious. If as Becker and all "agree" education is "the answer" then we have to pull out far more of the stops with the explicit goal of increasing the percentage of educated young folk.

Aside, from the college track, both from looking around and comparing what they seem to accomplish in Germany with a better "blue collar" apprentice programs, I'd think we could make some real headway at that level. How much is our economy held back by self-taught mechanics, cooks, waiters and those of other crafts? Many move from job to job, never excelling at one and it's almost rare to find "cooks" or other restaurant employees that know much about nutrition or service.

Lastly? The focus on "education" as excuse for the status quo avoids what is depicted in these two graphs: The FACT of ALL of the wealth from our per capita productivity gains going to those of the top one percent. However much is is "liked" it's simply not a sustainable trend. By one means or another the gains in wealth made by our society in cooperation with each other much accrue less divisively.

http://lanekenworthy.net/2008/03/09/the-best-inequality-graph/

Neither a capitalist (or mixed economy) nor a democracy can survive an ALL FOR THE RICH economic model, yet we continue to test the opposite at our peril.

We have formed our special style in all kinds of thermometers and other instruments, such as Digital thermometer,Digital Timer, etc. The products are sold to Germany, U.S.A.,Japan,south koren,England and so on.

Early childhood education does matter. Recent research shows that a quality early childhood program does have a lasting effect, and can help to resolve the inequities in our society today. Our government should be putting more funding into the birth to five years, and being more preventative rather than reactive. Read the below link for more information.

Imprisoning a whole LOT of Wall Street thieves and schuck and jive artists who sold "prime paper" out of one drive up window while shorting the very same toxic crap out the other window would do a lot, at least for the morale of those who work to scrape out a living and pay taxes off the somewhat progressive tax tables used by those not privvy to having their gleanings taxed at the very favorable, Romney Rate of 13%.

Lauri -- Yes, and what many nations have over the US is that of funding ALL of their schools equitably, while we suffer from using a property tax model that VERY often short funds the very schools of the lower income areas where the educational challenge is greatest.

I'd bet that were we to compare our "good schools" in "nice" areas to those of other nations that we'd stack up fairly well. Where we could make the most difference in bringing up the average, and thus having more who ARE prepped for college, or at least entering the work force, is by bringing up those lagging the most.

I'm reminded a bit of Army training, which for the quick learner is one of the most boring things possible. But the goal there is not to have half the class able to shoot with sniper-like accuracy or take their rifle apart at record speeds, but to make sure EVERY member of the company has a level of competency, which they generally achieve.

As to perceived economic class inequality in America, agree with Jack that "EDUCATION (meaning college) is hardly the full answer," if for no other reason that so many are too lazy to pay attention in school.

Against free enterprise and competition, Jack argues that "by one means or another the gains in wealth made by our society in cooperation with each other much accrue less divisively." This presumes some elite class that gets to decide when citizens are "cooperative" in the sense of allocating the economic fruits of their labors "less divisively."

Marxism, in other words. The State's knowledge must trump individual economic liberty.

affl, Ahh... Yes! "Economic Liberty"! Where such "Liberty" gave rise to the Trusts. Be they the Sugar Trust, the Oil Trust, the Steel Trust, etc. etc.. Where "wealth" accumulated in approx. the upper 1 to 2 percent of the population. J.P.Morgan, John D. Rockefeller and co. would be proud. And five dollars a day was considered an extravegant wage rate. You would probably only be worth fifty cents a day, if that...

"Economic Liberty" for the few? Whew! Thank a Republican Party that was Progressive and Populist in it's day under the likes of the guiding hand of Lincoln, Carey, Sherman and Roosevelt (before it's transformation into the current monstrosity it is today). ;)

Tans: Well, No. "Lazy?" "Inattentive?" Our profs indicated part of the problem being that of IQ distribution that tends to limit the numbers who can enter and/or graduate college.

I point out that the numbers are further limited by the often prejudicial short funding of "those" schools that today include those of many poor urban and rural whites. (One assumes that the higher achievements attained in the more civilized nations are not due to a much higher average IQ?? Or? did the culls emigrate to the US leaving the prime stock behind?)

Here's a couple of graphs depicting the soaring, and one assumes unsustainable income inequity:

http://lanekenworthy.net/2008/03/09/the-best-inequality-graph/

Now DO we assume that it's an inherent and uncorrectable flaw in "capitalism" that it becomes so constipated every 50-75 years that it has to completely crash? With 1930's style "hopes" that it CAN be rescued?

Then, as a matter of a functioning democracy when its economic system only serves the Lords how long would you estimate they'll put up with it?